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JAMB Economics 2006 Question 50

Question 50

Theory of Production

A constraint on the expansion of a firm is the

  1. A.rate of advertisement
  2. B.size of the market
  3. C.level of the producers' income
  4. D.tastes of the consumers
Show the answer and explanation

Answer: B (size of the market)

Explanation

A firm cannot grow beyond what its market can buy; a small market limits expansion.